Some two decades ago, it was thought that only the Multinational companies will corner huge market shares in every business, and that most of the Indian family-manged groups will disintegrate and fall aside.

However, this has not happened as all.  How these companies have managed the big transition is something that can be learned from a number of case-studies.  Yet, we can zero in on some common parameters that have enabled them to survive and grow to this extent.

Massive influx of professionals

Bajaj Auto, Hero Motors, TVS Motors, Mahindra and Mahindra, among several other such companies, have grown by giving their professional managers total freedom.  In fact, the presence of the IIT and IIM graduates has often made a huge difference.  For example in Mahindra and Mahindra, the emphasis has been on acquisition, and with acquisition, the group has grown from strength to strength.  

In tractors, for instance, it is a world leader, and is among the top companies of the world, in terms of quality, reliability, and business excellence.  Mahindra & Mahindra Finance is one company that has virtually conquered a huge amount of money from the rural market, and is very much focused on the farmer, to grow the tractor business.

At TVS Motors, the emphasis is on giving the professionals a big scope for innovation.  It is still a big player in the market, and hopes to grow from strength to strength in the coming years.

World-class quality

Indian organizations are heavily focused on providing world-class quality.  For example, the VIP brand of luggage is equal to the best in the world, in terms of quality.  The TVS group of companies from Chennai, have superb quality practices.  Most of the companies of this group are Deming Award winners.  Deming Award is a prestigious award from the Japanese Union of Scientists and Engineers, which is given only to some companies that can demonstrate commitment to world-class quality performance, very consistently, over several years.

Every single Indian company engaged in the manufacture of cement, for example, is able to compete with the best in the world, and export products to even the advanced countries.

Building of New Competencies

Indian organizations, particularly those in the IT sector, have built formidable new competencies.  For instance, TCS, Infosys technologies, WIPRO and HCL, among several others like Mastek, have mastered the art of serving any global giant.  The relatively low cost of highly qualified and experienced manpower, available in plenty from thousands of engineering colleges across the country, has brought about this transformation. 

The manufacturing companies are also into this game.  For example, recent developments in supply chain management have actually brought into focus a number of new initiatives.  The Confederation of Indian Industry has taken a big lead, and several new practices have begun to emerge.  these are Master's Degree courses available on this subject, and these have helped the Indian companies learn really good professional practices.

Focus on HR practices

Gone are the days when the Human Resources Function (HR), was a mere administrative function.  Today, a new breed of professionals in HR have a clear mandate -- help every single employee realize his or her potential.  Performance Management has become professional, in terms of both intent and purpose.  So has training and development, which is now business-driven.  

Mentoring of youngsters is now done, on a regular basis.  The finance professionals, like Chartered Accountants and the Cost Accountants have also helped a great deal, and nurturing of young talent in various facets of financial management is now on in a much bigger way.

The Indian Institutes of Management and other leading institutes have also helped a great deal in this transformation, as there has been a big change in the professional attitude of owner managers and the need for change in a very big way.

The recent professional changes in HR Management, in the Godrej Group, for instance, are very encouraging.  Similarly, Marico Industries and Asian Paints, are two outstanding examples of world-class HR practices.

 Change in mind-set of owner managers

When the business environment is so complex, managing with the age-old practices can never help.  The new need of professionals need to take up higher responsibilities and perform.  For example, a huge number of companies have embraced very good quality management practices like Six Sigma and Total Quality Management ( TQM).  This is due to a massive change in mindsets of owner managers who now think differently and act differently.  Most of them are highly qualified.  This is a big plus, and helps in professional management of scarce resources.

Role of Government 

Most importantly, the Central and State Governments have made the business environment much easier for doing business.  For example, several States now have a single window system, which makes decisions much faster.  Many have liberal attitudes towards labor, and many employers themselves are becoming more welfare-oriented, when the cost of doing business comes down. 

A big change in the nature of family managed businesses, is always very good for the economy.  However, those businesses that have not added value, should do a lot of soul searching and find out ways and means to survive and grow, in a rapidly changing, unpredictable, and complex global business environment.

Indian business has never had it so good. The first round of globalization, is indeed a great plus for Indian family managed companies. 


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